Costly Labor Adjustment: General Equilibrium Effects of China's Employment Regulations

This research was supported by a National Science Foundation (# 0819682) to Russell Cooper, a National Science Foundation of China grant (# 70903004, #71273001) to Ping Yan and Russell Cooper, and a National Science Foundation of China grant (#71273162) to Guan Gong and Russell Cooper. The Department of Social Science of Peking University provided additional research funding. Huabin Wu provided outstanding research assistance on the initial phases of this project. Immo Schott contributed to further developing the code for the policy analysis. We are grateful to John Haltiwanger and Jonathan Willis for sharing code from an earlier joint project. We are grateful to seminar participants at the European University Institute, the University of Alicante, University of Cyprus, the Federal Reserve Bank of St. Louis and the University of Rochester for helpful questions and comments. Comments and suggestions from the referees and editor that substantially improved our analysis and discussion of results are gratefully acknowledged. The views expressed herein are those of the authors and do not necessarily reflect the views of the National Bureau of Economic Research.

• August 14, 2013